SFO investigation Capital

The Serious Fraud Office has begun an investigation into Capital + Merchant Finance following a referral from Grant Thornton, the receivers of companies within the Capital + Merchant Group.

SFO chief executive Adam Feeley said the investigation was focused on specific transactions which, on current information, appeared to have benefited certain related parties through the use of Capital + Merchant funds in contrived structures and with questionable supporting documentation.

"The investigation is in its early stages. The immediate focus of our work is to gather, analyse and evaluate all the relevant documentation around these transactions, and form a view as quickly as reasonably possible as to the merits of these matters," Mr Feeley said today.

The SFO would be speaking with people involved in the matters, including those who may have benefited from them.

"We have received excellent co-operation from Grant Thornton, and from other parties including the second receivers Korda Mentha."

Richard Simpson and Timothy Downes of Grant Thornton were appointed receivers and managers of Capital + Merchant Finance in November 2007 by first ranking secured creditor Fortress Credit Corporation.

Grant Graham and Brendan Gibson of Korda Mentha were appointed receivers about a week later by Perpetual Trust, which acted as trustee for about 7000 debenture holders.